The SBA 7(a) loan is one of the most powerful tools available to small businesses looking to grow, expand, or stabilize their operations. Backed by the U.S. Small Business Administration (SBA), this loan program offers flexible terms, competitive interest rates, and a wide range of eligible uses.
But despite how common the program is, there are still a lot of myths and misunderstandings out there. At Veritex Bank Government Lending, we’re here to break it down and clear things up.
Here are the top seven myths and questions we hear most often about the SBA 7(a) loan —and the truth behind each one.
Truth: Quite the opposite. SBA 7(a) loans are intended for healthy, for-profit businesses with strong business plans and a demonstrated ability to repay debt. In fact, many SBA loan recipients are thriving businesses that use this financing to expand, acquire other businesses, or buy commercial real estate. The SBA doesn’t lend to “bail out” failing companies—it supports growth.
Truth: The SBA doesn’t lend money directly to small businesses—instead, it guarantees a portion of the loan issued by an approved lender, like Veritex Bank. That guarantee gives lenders added confidence to support businesses that may not qualify for conventional financing. As a Preferred SBA Lender, Veritex Bank has earned the authority to streamline the approval process and manage your loan from start to finish, including application support, deal structuring, and underwriting. When choosing a lender for your SBA loan, working with a Preferred Lender can make a big difference in speed, efficiency, and expertise.
Truth: It’s true that SBA loans require a bit more paperwork than conventional loans, but experienced lenders can streamline the process. As a Preferred SBA Lender, Veritex Bank can move faster than most. Many SBA 7(a) loans can close in about 30–45 days, depending on the complexity of the deal and how quickly you provide the required documents.
Truth: One of the biggest advantages of the SBA 7(a) loan is its flexibility. Yes, you can use it to purchase or renovate owner-occupied commercial real estate, but that’s just one of the many options. You can also use it for:
If it supports your business’s growth, there’s a good chance it qualifies.
Truth: SBA 7(a) loans are generally more accessible than traditional financing. While strong credit is helpful, we know that building a business comes with ups and downs, so a perfect score isn’t required. At Veritex Bank, we take a holistic view of your financial picture, including business performance, cash flow, and available collateral. Although the SBA doesn’t set a minimum credit score, as a Preferred Lender, we typically look for a score of 650 or higher.
Truth: Startups can apply, but the SBA 7(a) loan is most used by existing businesses. In fact, it’s often used for expansion, acquisition, or owner-occupied real estate purchases by companies that have been operating for several years.
If you’re buying a business, expanding into a second location, or purchasing a warehouse for your operations, this loan could be a great fit—even if you’re not a startup.
Truth: While the SBA 7(a) loan is ideal for businesses seeking $500,000 to $5 million, it’s by no means limited to “small” deals. In fact, $5 million is the maximum loan amount under this program, and that funding can be structured to support large, complex transactions, including multi-million-dollar acquisitions, equipment financing, and major real estate investments.
At Veritex Bank, we routinely close SBA 7(a) loans for businesses with big goals, and we know how to get creative when it comes to structuring larger transactions.
The SBA 7(a) loan is one of the most flexible, widely used, and impactful financing tools available to American small businesses—but only if you understand how to use it.
At Veritex Bank Government Lending, we specialize in helping business owners unlock this powerful funding option and use it with confidence. We’re here to answer your questions, simplify the process, and get you to the closing table faster.
If you’re considering an SBA 7(a) loan and want to know what’s possible for your business, reach out to the Veritex Bank Government Lending team. We’d love to explore your goals and help you map out a clear financing path forward.
Veritex Community Bank is a Preferred SBA Lender and one of the nation’s top-performing government-guaranteed lending institutions. We’re here to help you grow.
